The Week Ahead: The congressional elections jolted Washington but not Wall Street as the power shift to Democrats could not stop momentum in stock prices. Profit growth for the 4th quarter and interest rate direction is now the focus. Tuesday finds the PPI and retail sales numbers for October as well as business inventories for September. Wednesday has crude oil and gasoline inventories. On Thursday, October's CPI, industrial production, and capacity utilization reports come out. Last is Friday's October housing starts.

Stocks to Watch: Three important earnings releases are do this week for Hewlett Packard (HPQ), Home Depot (HD), and Wal-Mart (WMT). Of these HPQ appears to have the steadiest uptrend. Boeing (BA) received another significant contract, this time for Air Force combat helicopters worth up to $13 billion spurring confidence in the defense sector despite the changes in Congress. Shares of NYSE Group (NYX) are gaining ahead of a key vote by Euronext NV shareholders in December that could finalize a merger between the two company's.

Special Note: Despite the underlying weakness building in many fundamental and technical indicators for the markets as noted in previous weeks in this column, seasonal bullish tendencies for November and December seem to have the upper hand for investors especially since enough momentum has built up since June and July to carry markets to year end. Regardless, buyers beware and be prepared for the formation of a completed top as 07' approaches. Diversify portfolios with a mixture of longs and shorts spread among various sectors.


Commentary provided by Barry ward, Registered Principal at NobleTrading.com, Inc.

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